The flood insurance world can be a confusing place and the mortgage world can be even more confusing.

You have all these different guidelines fro different loan types. Then there are residential loans and commercial loans.

Today we want to look at Fannie Mae loans. Here at The Flood Insurance Guru we work with every kind of loan out there. However we spend some extra time on Fannie Mae and Freddie Mac loans.

The video below gives a brief explanation of how these loans are different when it comes to flood insurance.


Today we want to look at Fannie Mae loans and some things you need to know before taking out this type of loan in a special flood hazard area.

First of all what is a special flood hazard area?

This is the area that falls within the 100 year flood zone. Don't let that fool you this area can flood on a regular basis.

Flood insurance is required if there is a mortgage on a property in this area.

Now lets look at some things you will want to know about Fannie Mae loans

  1. Replacement cost
  2. Loss of income
  3. No financing
  4. No installments

You may have heard us discuss replacement cost and actual cash value policies. Its important to know that Fannie Mae requires replacement cost on properties in these areas.

So what about loss of income?


Fannie Mae usually requires 12 months of loss of income in these areas as well. There are many flood insurance companies that do not even offer loss of income. The National Flood Insurance Program is one of them.

Now lets look at payment options. When it comes to paying for your flood insurance there are a few things Fannie Mae will not allow when it comes to making your flood insurance payment.

They will not allow premium financing on flood insurance policies. This is when you reach an agreement for a company to pay the premium and you agree to pay monthly or in installments. This can also carry a high interest rate with it.

The other type of payment Fannie Mae will not allow is installments. While most flood insurance companies do not offer installments it is a popular thing for commercial insurance.

So there are some things to look out for when doing your Fannie Mae loan. So if you have further questions about flood insurance then click here.

You can also check out our daily flood education videos on YouTube or our podcast.

Remember we have an educational background in flood mitigation. So we are here to help you understand your flood risks, flood insurance, and mitigating your property long term.

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Chris Greene


Chris Greene

President of The Flood Insurance Guru
M.S. in Emergency Management with a focus in Flood Mitigation